It’s been a rough journey for the cryptocurrency market in 2022. By November the market was down by more than 70% from its previous peak in November 2021. And just when things were looking down, the FTX crash made them look more dire. The question is, can the crypto market be able to recover by 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. Each time, it has bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. But, in 2017, it broke that record, and hit a new record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, it broke through that resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a prolonged bull run that eventually breaks through the resistance created by the previous market’s highest price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case can lead to increasing participation in the market and, in turn, drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are now exploring the potential for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and lead to higher prices.
Government regulations
As the market for crypto continues to mature, governments around the world are starting to create more favorable rules for crypto. This is likely to attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven investments like gold and crypto. Because the global economic climate is uncertain it could result in increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors, are also starting to invest in the crypto market. With increasing numbers of everyday people learn about crypto and the best ways to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing as more and more people are starting to learn about and understand the concept. As understanding and acceptance of crypto grows it could result in increasing numbers of people purchasing as well as holding the crypto that can raise prices.
defi crypto staking pool
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services created using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows increasing numbers of companies are beginning to accept crypto as a means of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are beginning to show interest in crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is its ability to make swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s increase, it will become easier for individuals to purchase and keep crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as real estate or stock, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of retailers start accepting crypto as a means of payment, this will make it more convenient for people to utilize and store cryptocurrency, which will drive up demand and prices.
So, is crypto likely to rise in 2023? It’s only time to find out. But with these factors being considered, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are committed to the long-term, being patient and disciplined is essential.